Levers of Control by Robert Simons
Robert Simons gave five levers of control in Strategy Focused Organization. The purpose was to clear some of the confusion about how the BSC should be used or at least provide the basis for the discussion over the confusion. These levers give the managers in large companies a framework to manage the tension between the value i.e. creation and the control i.e. managing and measuring value. These levers were given in a book named Levers of Control-How Managers Use Innovative Control Systems to Drive Strategic Renewal.
The five control levers are:
- Belief Systems
- Boundary Systems
- Internal Control Systems
- Diagnostic Systems
- Interactive Systems
The Belief Systems are related to the fundamental values of an organization. For example: Mission statements and Vision statements, Credos and statements of purpose.
The Boundary Systems are used to describe the constraints in terms of the employee behavior. For example: Forbidden Actions, codes of conduct, predefined strategic planning methods, asset acquisition regulations and operational guidelines.
The Internal Control Systems are related to the protecting assets. For example: incorporation of process data into management interaction, face to face meetings with the employees, challenging data, assumptions and action plans of subordinates.
The Diagnostic Systems are used to provide the information theoretically that indicates when a system is in control and when the system is out of control. For example: output measurement, valuation standards, incentive systems and compensation systems.
Interactive Systems focus on the organizations communicating and implementing strategies and promote learning and growth.
The confusion arises how and where the balanced scorecards fit into the levers of control. Kaplan and Norton, partners of Robert Simons believed that the successful balance scorecards adopters use the scorecard as an interactive system. In some cases, the balanced scorecards implementations have failed because the companies have referred to diagnostic systems.
Written by: Matt
We also suggest this relevant article if you have time: What is Supportive Leadership?
Some other similar articles
Tagged as acquisition regulations, asset acquisition, balance scorecards, belief systems, control levers, credos, diagnostic systems, employee behavior, incentive systems, innovative control systems, interactive system, interactive systems, kaplan and norton, levers of control, operational guidelines, protecting assets, robert simons, statements of purpose, valuation standards, vision statements + Categorized as Economy articles, Ladership & Management